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As Ohio continues to struggle with rising electricity rates from its largest utility companies, more critics have emerged declaring that the state's electricity deregulation policy fails to adequately encourage competition among electricity providers, according to The Columbus Dispatch.
Electricity deregulation in Ohio began in the late 1990s, but many policy makers were concerned about a head-first jump into competitive electricity prices and so they decided to ease the state slowly in that direction. This resulted in residents having access to alternate electricity providers in some areas and only the utilities in others.
However, this has also led to a change in the way utilities determine electricity prices, from a fixed formula allowing for a small profit to more complex negotiations that have led to higher prices.
"We’ve ended up with inefficiency of regulation and the volatility of markets," Ken Rose, a Columbus-based economist who specializes in electricity-market structure, told the Dispatch. "We’ve gotten the worst of both worlds."
Former Lieutenant Governor and State Senator Bruce Johnson noted that electricity rates used to be determined strictly based on the costs to provide the service, resulting in low costs and low profits, but a recent report from The Columbus Dispatch found that the Ohio utilities operated by American Electric Power have proven most profitable in recent years.